Shares in easyJet (LON:EZJ) rose in the previous session, as analysts at JPMorgan turned bullish on the budget carrier, pointing to much improved pricing outlook for the company. The comments were a boost for the low-cost airline which updated investors on its traffic statistics yesterday.
easyJet’s share price closed 1.26 percent higher at 1,444p yesterday, outperforming the broader UK market, with the benchmark FTSE 100 index ending the session marginally higher. The group’s shares have added more than 47 percent to their value over the past year.
JPMorgan bullish on easyJet
JPMorgan Cazenove lifted its rating on easyJet from ‘underweight’ to ‘overweight,’ and hiked its price target on the stock from 1,330p to 1,550p. The move came after the London-listed low-cost carrier agreed a deal to acquire some of insolvent Air Berlin’s assets.
WebFG News quoted the bank as pointing to a "much improved" pricing outlook for the financial year 2018 and estimated profit contributions from FY19 onward related to the German carrier’s slots.
“There is no change to our standing concerns around Brexit-related uncertainty given EZJ’s outsized exposure to UK point-of-sale,” the broker explained,” adding that it believed that the market was “more likely to refocus on these risks after the summer peak season”.
Swing from loss to profit
WebFG News reports that JPMorgan further projects a swing from the guided £60 million FY18 Air Berlin pre-tax loss to a profit of £36 million in FY19, largely owed to growth and load factor improvement more than offsetting a projected fare headwind of around two percent.
The upbeat comments came as easyJet posted its November traffic statistics, noting that it had carried 5.35 million passengers last month, making an 8.1-percent rise on the prior-year period.